CHF: Technical correction started for Swiss Franc

At the Forex currency market Swiss Franc rate began technical pullback from historical highs on Tuesday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is moving down, giving a pair sell signal. Stochastic oscillator is giving a pair buy signal, coming out of the oversold zone. 

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9420 the pair will go to 0.9450 and 0.9470. If the level of 0.9370 is exceeded, traders’ targets will become the levels of 0.9350 and 0.9330.

It became known yesterday that index of business activity in Swiss industries declined to 59.6 points in December against the forecast of 61 points and the previous index value of 61.8 points.

It is worth noting that investors’ withdrawal from high- yielding currencies yesterday had been in some way provoked by the U.S. statistics (business activity index in productive sector demonstrated growth which inspired traders) and the factor of oversold in the pair USD/CHF which has been continuing for a long time has become another factor that triggered technical pullback.

In other respects situation in Swiss economy remained unchanged.
Interest rate in Switzerland (Libor) is currently in the target level of 0-0.75%; the next meeting of the Swiss National Bank is scheduled for 17 March.  Subsequent meeting of 2011 will be held on 16 June, 15 September, 15 December.

According to the data released at the end of December, KOF indicator in Switzerland fell to the level of 2.10 in December against its previous value of 2.13; however it still remains at a high level, confirming the belief that country’s economy continues to recover.

According to KOF estimates (Swiss institute of research on economic cycles) Swiss Franc will retain the status of a protective asset and a refuge as long as the period of tension will be maintained in Europe.

KOF has also revised its forecast for GDP growth upward in 2011; is it projected that Swiss economy will increase by 1.9% in 2011 against the previous forecast of 1.8%. In 1012 national economy is expected to rise by 2%.

 

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